Mercury emissions and impacts are of growing interest to regulators and the regulated community. Issues of concern range from air and water discharge permitting to proper disposal of mercury-containing wastes to clean-up issues involving contaminated sediments. Mercury’s profile as a chemical of high environmental concern has grown steadily, and it now sits at the center of contentious environmental debates. This Update highlights one such contentious issue: a North American Free Trade Agreement ("NAFTA") complaint challenging the United States Environmental Protections Agency’s ("EPA") regulation of mercury emissions and discharges.

The Complaint

Environmental groups have asked the environmental commission associated with NAFTA to pressure EPA into changing course on the control of air emissions and water discharges of mercury.

In September 2004, several U.S. and Canadian environmental groups filed a complaint under NAFTA’s citizen complaint procedure alleging that EPA was failing to enforce the Clean Air and Clean Water Acts by not forcing additional reductions in mercury air emissions and water discharges from U.S. electric power plants. After reviewing the complaint and EPA’s answer, the Secretariat of the Commission for Environmental Cooperation ("CEC") recommended to its governing board that the CEC be directed to prepare a "factual record" regarding some of the allegations raised in the complaint. If preparation of the "factual record" is ordered, private parties will have opportunities to participate in the process.

The environmental groups’ complaint charges EPA with violating the Clean Water Act by allowing the discharge of mercury to water bodies that already have fish consumption advisories due to mercury contamination. The groups also allege that EPA has allowed total maximum daily loads ("TMDLs") for mercury-impaired water bodies to be issued without accounting for air emissions of mercury from upwind power plants. Despite EPA’s response to these allegations, the Secretar iat recommended that the CEC order preparation of a "factual record" and fully consider these issues.

With respect to the Clean Air Act, the groups allege that EPA has not limited power plant mercury emissions sufficiently to ensure that water bodies where the mercury is deposited meet water quality standards. The Secretariat did not recommend development of a "factual record" for this allegation.

Creation of Factual Record

The Secretariat’s recommendations now go to the top environmental officials of Canada, Mexico, and the United States, who form the Commission’s governing body. If two of these officials vote to prepare the factual record, the Secretariat will proceed. If, as expected, the Secretariat proceeds to create a factual record on these issues, no formal legal obligations will arise for either the U.S. or any private company in the U.S. This process, however, raises a number of substantive concerns, including:

  • creating a factual record that might be used against coalfired utilities in regulatory, personal injury or property damage litigation in the U.S.;
  • leverage to influence legislative or regulatory decisions at the federal or state levels; and
  • an opportunity for staff in federal or state regulatory environmental agencies to advocate or legitimize on the international stage views inconsistent with those of the current Administration.

This fact-finding process could easily become a formal and public platform for a major attack on mercury emissions from coal-fired power plants outside the normal legislative, regulatory and judicial processes of the U.S.

The CEC creates a factual record from a variety of sources:

  • The CEC must accept submissions from the parties, which will include the U.S. and the complaining environmental groups.
  • The CEC may, and typically does, solicit and accept submissions from public and private stakeholders.
  • The CEC also typically relies on publicly available information.

This process provides private parties at least two opportunities for input into the creation of the factual record. First, private parties may make direct submissions on their own behalf. Equally important, private parties may provide input to the U.S. government’s submissions to the CEC. At a minimum,the U.S. agencies involved in this process will be the State Department, EPA and the Council on Environmental Quality.

It is important at this stage of the process, where it is likely that the CEC will proceed to develop a factual record, for a company with air emissions or water discharges of mercury to assess its overall public, political, legal and factual strategy. The development of a factual record in an international forum such as NAFTA’s CEC, where the U.S. government is the primary "party," is a very different process from traditional regulatory or legal proceedings in the U.S.Without input by a company with mercury issues, the company’s perspective and concerns may be overlooked.

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This article has been prepared by Sidley Austin LLP for informational purposes only and does not constitute legal advice. This information is not intended to create, and receipt of it does not constitute, an attorney-client relationship. Readers should not act upon this without seeking professional counsel.